Klarinet Archive - Posting 000090.txt from 2003/11
From: ormondtoby@-----.net (Ormondtoby Montoya) Subj: Re: [kl] Re: Music 123 Date: Wed, 5 Nov 2003 17:14:11 -0500
R.=A0Williams wrote:
> Historically, many manufacturers opted for
> what is called three step distribution [snip]
> A place like Wallmart or WWBW represents
> two step distribution, dealer to customer.
> [snip] Two step distribution however may
> have the problem of allowing the super-dealer
> to become overly powerful to the point they
> dictate
Another possible outcome, which occurred in the industry from which I am
retired, is that the the largest distributors, after they became
mega-distributors, began to acquire *each other* in order to gather even
more purchasing power. At first, the manufacturers encouraged this
(for the reasons that R.Williams cited) by making life untenable for
smaller distributors. But then the few mega-distributors chose to
distribute for only one manufacturer in order to have 'killer'
purchasing power with the manufacturer that they chose. In this
respect, they differed from giants like WW & BW, who sell many brands.
The end point, which was reaching its conclusion when I retired, was
that only two mega-distributors remained. But... there were 10-15
manufacturers who still needed distribution, and some of them couldn't
find it. So the manufacturers had to choose between acquiring each
other (about half of them did) in order not to be left out in the cold,
or they had to build their own distribution networks from scratch (which
the other half of them tried to do, and some of them failed).
It was a moment of [I'll forego the adjectives] when, after retirement,
I happened to meet a salesman whom I had known well in 'the old days'.
He had worked for one of the manufacturers who was forced to seek merger
after two mega-distributors had merged and his employer was instantly
without distribution and incapable of surviving.
But my point is that *manufacturers* disappeared as well as
distributors. Thus the consumer suffered a double-whammy. I asked
the salesman about particular products that I knew well, and apparently
all the bad things (from the consumer's point of view) have indeed
happened. Specialty products have disappeared, one size fits all,
prices have escalated beyond the effect of inflation, delivery times
have lengthened by at least a factor of two, etc etc.
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